Financial Management

GAO discussed the Bureau of Indian Affairs' (BIA) management of the Indian Trust Funds. GAO noted that: (1) BIA has experienced inadequate controls and accountability over many of its trust fund accounts, and the Office of Management and Budget has placed trust fund accounting on its high risk list; (2) although BIA is dependent on accurate and complete land ownership records to properly distribute revenues, audits have shown continued problems with those land records; (3) fractionated interests have impacted BIA maintenance of land ownership records and trust fund accounting, primarily because BIA must account for numerous small transactions; (4) BIA ability to properly account for trust fund monies is impacted by the processes and procedures used by the Minerals Management Service (MMS) to collect, report on, and distribute Indian oil and gas royalties; (5) BIA has difficulty using oil and gas revenue collection and distribution data it receives from MMS to ensure that revenue is credited to the proper accounts, and has developed a computer program to enable it to better analyze this information. GAO believes that, if BIA is to effectively manage the Indian trust funds, it will need to address the problems that impede accurate accounting, including factors outside of BIA control that affect account maintenance, but BIA cannot resolve those problems itself.